Monday, October 20, 2008

Confidentiality in Settlements

There's a new RAND paper at SSRN, written by James Anderson of that organization, discussing a situation in which not requiring (indeed, not permitting) confidentiality in settling mass tort cases may be beneficial to defendants.  His case study is of the Baycol litigation.  The abstract:

Settlement agreements that require a plaintiff not to disclose or publicize any information about her claim are both common and controversial. Under some conditions, however, a mass tort defendant will rationally choose to discourage such secrecy. A defendant can use publicity to act as a commitment device akin to a most-favored-nation agreement to increase its bargaining power with plaintiffs. The paper uses the real world example of Bayer's cerivastatin litigation as a case study to illustrate this theory in practice and to explore the public policy implications of this finding.

(I was a defense lawyer for Bayer in the Baycol litigation but had no involvement in this paper.)

--BC

http://lawprofessors.typepad.com/tortsprof/2008/10/confidentiality.html

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